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Oil, gas firm scores $1 billion

Antero Resources receives private equity financing

Gargi Chakrabarty, Rocky Mountain News

Published August 16, 2007 at midnight

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A private Denver oil and gas company landed $1 billion in equity financing from Wall Street on Wednesday, reinforcing the status of the Rocky Mountains as a top gas-producing region of the nation.

Antero Resources Corp. received the massive equity infusion from private firms Warburg Pincus, Yorktown Energy Partners VII LP and Lehman Brothers Merchant Banking Group.

This is the third time private firms have helped the company, since writing checks for $260 million at its inception in 2002.

Led by local oil and gas veterans Paul Rady and Glen Warren, Antero will use the money to drill 50 wells a year in each of the two areas where it has operations - the Piceance Basin in Colorado and the Arkoma Basin in Oklahoma.

Antero's resurgence comes two years after it sold all its natural gas assets, mostly in the Barnett Shale formation in Texas, to XTO Energy in Fort Worth for $685 million. Since then, the company has kept its name and headquarters in Denver along with more than two dozen employees who stayed on to rebuild the company.

A trained geologist, Rady has built and sold several companies during his 30 years in the energy industry, but that strategy could change.

"Our model is not to sell anytime soon," the 53-year-old Rady said. "We will continue looking for other unconventional resource projects, shale plays and the like for a good many years and keep building to see where it takes us."

Antero has four drilling rigs in Piceance Basin, seven in Arkoma and about 100 producing gas wells. It has more than 120,000 leased acres with 2,800 drilling locations identified.

Rising oil and gas prices have made it easier for experienced industry executives in Denver such as Rady to get money from Wall Street to pump into traditional energy companies.

Peter Dea, the former chairman and CEO of Western Gas Resources also has started a private company in Denver, Cirque Resources. Western Gas was bought by Texas oil producer Anadarko for $5.3 billion last summer.

"In the next 30 to 40 years, traditional energy is going to be the elephant in the room. I am not in the least surprised that Wall Street is chasing after those forms of energy," said Lakshman Guruswamy, director of the Security Initiative and the Nicholas Doman Professor at the University of Colorado School of Law.

"But pursuing an economy based on hydrocarbons is not a wise thing to do. Hydrocarbons cause climate change, and there is no question that we are relying on a resource that is exhaustible."

Paul Rady's résumé

• 2002-present: Antero Resources chairman and CEO. Sold off the company's assets to XTO Energy in 2005 for $685 million. Landed $1 billion equity financing Wednesday from Wall Street to rebuild the company.

• 1998-2001: Pennaco Energy chairman and CEO. Sold the company to Marathon Group for $500 million in 2001.

• 1990-1998: Barrett Resources president and CEO. The company sold to Williams Cos. in 2001 for $2.5 billion.

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